Rate cuts boost homebuyer sentiment

Written by Australian Property Investor Magazine Friday, May 18 2012 Buyers in Australia are more confident about buying a house or apartment now than they were six months ago, according to the latest CBA/Mortgage and Finance Association of Australia Home Finance Index.The index shows Australian households are at their highest levels of financial confidence since May 2011.The survey of 1447 people also found 51.7 per cent of homebuyers believe now is a good time to buy a new home, compared with 36.1 per cent six months ago.Fewer respondents feel financially worse off in March 2012 (35.1 per cent) compared with 38.8 per cent six months ago.Homebuyers’ optimism is being driven by flat property prices and lower interest rates, both creating a ‘buyers’ market’. Increasing rents have also led more than two thirds of first homebuyers (65.4 per cent) to re-evaluate the trade-off between renting and buying.Mortgage and Finance Association of Australia chief executive officer Phil Naylor says the renewed confidence is a positive indicator for the mortgage market.“While the cost of living pressures and employment uncertainty are placing a strain on some households, these concerns are balanced by positive factors such as lower house prices and interest rate cuts,” he says.